Ford announces $11.4 billion electric vehicle investments in Tennessee and Kentucky

Shannon Jones

Ford Motor Company this week announced an unprecedented $11.4 billion investment in electric vehicle production targeted for sites in Tennessee and Kentucky. The investment, being made in partnership with South Korea-based energy company SK Innovations, is the largest manufacturing investment in the company’s history and will create two large manufacturing complexes, one near Memphis, Tennessee, and the other south of Louisville, Kentucky.

The move presages a massive restructuring in Ford’s operations as it moves away from gas vehicles. The company has targeted a goal of 40 percent EV production by 2030. The new EV operations will be much less labor intensive than production of gas-powered vehicles, involving more technical operations and far fewer assembly jobs, since EVs require fewer moving parts.

The two new sites are expected to employ some 10,000 workers. The megacampus near Memphis is being called Blue Oval City, after the Ford logo, and is supposed to be the largest and most efficient factory in the company’s history, dwarfing the massive Rouge Complex outside Detroit, which was the largest factory in the world when it opened in 1928. It will include an assembly plant, a battery plant and a supplier park. According to the Detroit Free Press “Inside the plant, ‘zero-waste-to-landfill’ processes will capture materials and production scrap at an on-site materials collection center to sort and route materials for recycling or processing either at the plant or off-site.”

In Kentucky, the company is planning the BlueOvalSK Battery Park, which will consist of twin battery plants that will supply electric power for new Ford and Lincoln electric vehicles set for production later this decade. The first batteries will be produced in 2025 with the complex in full operation by 2026. Construction will start later this year.

When fully operational, the three battery plants will turn out 1 million units a year to power a range of Ford vehicles.

The new EV megasites dwarf Ford’s previous commitment of $950 million in the Rouge Complex in Dearborn, Michigan, to build the all-electric 2022 F-150 Lightning. It also puts Ford, at least temporarily ahead of other major carmakers in the shift to EVs, including General Motors and Stellantis, as well as Japanese-based rival Toyota, which has focused more on hybrids rather than all-electric vehicles. However, General Motors is currently renovating its Detroit-Hamtramck assembly plant to produce new electric Hummers sometime next year.

The announcement of the new investments by Ford was immediately hailed by the United Auto Workers, with UAW President Ray Curry appearing with Ford President Jim Farley at an event in Memphis announcing plans to build an electric truck and battery plant in nearby Stanton, Tennessee.

In a groveling statement, Curry declared, “The UAW looks forward to continuing our long-time partnership with Ford as consumers transition to make electric vehicles in the right way. The UAW has always taken a lead in manufacturing innovation with our employer partners. We look forward to reaching out and helping develop this new workforce to build these world class vehicles and battery components.”

However, while praising its “partnership” with the UAW, Farley did not explicitly confirm that the UAW would be let into the new plants, both located in right-to-work states. “Obviously, they’ll have to hold an election, and it’s up to the workers, but Ford Motor Company has had a tremendous partnership with the UAW, and I wouldn’t want to change that,” the Ford president said.

There is every indication that, whether or not the UAW or some other union is ultimately recognized as the bargaining agent for workers at the new EV facilities, Ford will insist on a lower pay scale than is currently in place at its assembly plants to offset the investment costs and compete with the lower wages at Tesla, which currently is far ahead in EV capabilities. Investors have built up the stock of Elon Musk’s EV startup, which accounts for well under 1 percent of global vehicle sales, to the point where it has a market capitalization that dwarfs Ford and other makers of traditional gas-driven vehicles.

For its part, there is no doubt the UAW will agree to whatever terms the company demands in order to secure representation and the ability to collect dues from workers.

The company’s selection of sites in the Upper South, rather than Michigan, the manufacturer’s traditional base of operations, has set off bitter recriminations in the state. Referring to Ford’s selection of Tennessee and Kentucky sites, Randy Thelen, CEO of The Right Place, an economic development organization in Western Michigan, declared, “The automotive industry is Michigan’s game to lose, and we’ve lost the first inning.”

In announcing the project Ford shamelessly sought to shake down local governments for handouts, setting off a bidding war between states. In an interview on CNN Farley said, “Essentially, we need support to help customers make this transition financially.”

Kentucky, under Democratic Governor Andy Beshear, is ponying up $250 million in forgivable loans while offering an additional $36 million for training. Tennessee, meanwhile, has offered a massive $500 million incentive for the site outside of Memphis.

Explaining the choice of Tennessee and Kentucky, Lisa Drake, head of Ford global purchasing operations, said, “Battery cell plants are huge energy consumers, and a city can’t just whip together a plan anywhere. … We chose the best place for the company, the labor market and the environment.”

The construction of battery plants in the US is being presented in the context of a strategic move aimed at weaning US producers off reliance on China, particularly in light of the shortage of semiconductor chips from the Asia-Pacific region and global supply chain bottlenecks. It follows moves by GM and other automakers to locate battery production in the US . This is in line with the agenda of the Biden administration, which has indicated it views the development of a domestic supply chain for EVs as a matter of “national security.”

Given the scarcity of key battery ingredients, such as lithium and cobalt—80 percent of US supplies come from China—the plants will place an emphasis on recycling at the large Tennessee site. The complex will include a battery materials recycling facility that will recycle waste material from battery manufacturing so that it can be fed back into the battery plants. It will be operated by Redwood Materials, a company started by a former Tesla executive. The company has said it can recover more than 95 percent of cobalt, lithium, copper and nickel from batteries.

“This is a really important strategic bet to insource these key components. It won’t be the last,” Ford CEO Jim Farley said in an interview Monday published in the Free Press.

While the drive to produce electric vehicles is being presented in altruistic terms, as part of an effort to confront climate change, as with every other aspect of capitalist society it is subordinated entirely to the drive for profit. EVs promise massive cost savings to the auto giants due to the far lower assembly costs versus gas driven vehicles. This will of necessity entail a further attack on the jobs and living conditions of autoworkers.

US police have killed more than 30,000 people since 1980

Trévon Austin

A new study published in The Lancet found that US law enforcement killed at least 30,800 people from 1980 to 2019.

The study, conducted at the University of Washington School of Medicine’s Institute for Health Metrics and Evaluation, also found a sharp increase in police killings over the period covering almost 40 years. During the 1980s the mortality rate associated with police violence was 0.25 per 100,000. By the 2010s the rate jumped up to 0.34 per 100,000, an increase of 38.4 percent.

Moreover, researchers discovered that more than half of fatal encounters with police in the United States went unreported at the same time. The study estimated 55 percent of deaths from police violence were not reported or were misclassified in official government databases between 1980 and 2018. These unreported killings represent more than 17,000 deaths at the hands of US police that were kept from public view over a period covering almost 40 years. However, this troubling statistic is still likely an underestimation of the real impact of police brutality.

A demonstrator raises their hand while facing off against a perimeter of police as they defy an order to disperse during a protest against the police shooting of Daunte Wright, late Monday, April 12, 2021, in Brooklyn Center, Minn. [Credit: AP Photo/John Minchillo]

The new study provides a clearer picture of the issue of police violence in the United States. However, it does not fully account for the real social toll. What’s missing from this report is the untold number of victims that are brutalized by police but survive the physical and emotional scars bore by the victims and their families and the immeasurable suffering inflicted on families and communities that lose a loved one at the hands of police.

To grasp the extent of underreporting of police-involved killings, researchers compared data from the US National Vital Statistics System (NVSS), a government database that collates all death certificates, to three common open-source databases on fatal police violence: Fatal Encounters, Mapping Police Violence and The Counted. Open-source databases collect information from news reports and public record requests, encompassing a wider range of incidents.

The paper noted a Global Burden of Diseases, Injuries, and Risk Factors Study found that police killings accounted for 293,000 global deaths from 1980 to 2019. In 2019, the US accounted for 13.2 percent of the 8,770 global deaths at the hands of police, while only accounting for 4 percent of the world’s population.

“The difference these practices have on loss of life is staggering: No one died from police violence in Norway in 2019, and three people were recorded to have died in England and Wales from police violence between 2018 and 2019,” the researchers wrote.

Researchers discovered the top five states with the highest underreporting rates were Oklahoma, Wyoming, Alabama, Louisiana and Nebraska. The states with the highest mortality rate of police brutality were Oklahoma, Washington D.C., Arizona, Alaska, Nevada and Wyoming. Additionally, the paper found that men are killed by police at significantly higher rates than women, with 30,600 police-involved deaths recorded among men and 1,420 among women between 1980 and 2019, a difference of over 2,000 percent.

The study suggested “several factors” are behind the underreporting, including clerical mistakes wherein a coroner or medical examiner may fail to indicate police involvement in a death certificate’s cause of death section. However, the grim reality is that the cover-up of police murders is a conscious policy of the American ruling class and police state.

The researchers noted the fact that coroners and medical examiners are often embedded within police departments and may feel “substantial conflicts of interest” that disincentivize them from indicating law enforcement involvement in a death. The study cited a 2011 survey of National Association of Medical Examiners members that found 22 percent of respondents reported having been pressured by an elected official or appointee to change the cause or manner of death on a certificate.

The national media and the Democratic Party frame police violence as a purely racial issue. Following the sentencing of former Minneapolis Officer Derek Chauvin, President Joe Biden claimed the murder of George Floyd “ripped the blinders off for the whole world to see the systemic racism” imbedded in American society.

The “race, not class” mythology of police killings has been incessantly promoted by the Democratic Party and its political satellites. Regardless of a victim’s skin color, the epidemic of police violence in America devastates families and impacts entire communities. However, this is not how police brutality is presented in the national media.

Undoubtedly, racism plays a role in many police murders and accounts for the fact that minorities are killed at rates disproportionate to their share of the national population. However, a more thorough analysis shows that the killing of minorities by police is only one aspect of the reign of terror by American police against the working class.

A 2018 analysis of police violence statistics published by the World Socialist Web Site found that when economic and social demographics of the cities and counties where people are killed by police are taken into account, the glaring racial disparities that are the focus of the media and the Democrats largely disappear.

Rather, police violence is concentrated on the poorest and most disadvantaged men and women.

“Police violence is focused overwhelmingly on men lowest on the socio-economic ladder: in rural areas outside the South, predominately white men; in the Southwest, disproportionately Hispanic men; in mid-size and major cities, disproportionately black men. Significantly, in the rural South, where the population is racially mixed, white men and black men are killed by police at nearly identical rates. What unites these victims of police violence is not their race, but their class status (as well as, of course, their gender).”

In 2020, police killed 475 white people, 241 black people and 169 Hispanic people, as well as 126 people of unknown race. Police violence affects all sections of the working class. Presenting police violence as a racial issue only serves to divide the working class and obfuscate the social processes behind police killings. In truth, the epidemic of police violence in America is reflective of a society defined by an immense and ever-growing social inequality.

For decades, conditions for American workers have become more dire as their real wages stagnate and social programs eliminated in favor of the militarist aims of American imperialism. The financial crisis of 2008-09 exacerbated the misery of the working class, as well as police killings. Significantly, the study published in The Lancet recorded a sharp uptick in police killings around this time, further indicating a link between America’s social crisis and police killings.

This is further established by the experience of the COVID-19 pandemic. While workers and children are forced into unsafe environments, endless sums of money are made available to the ultrawealthy to continue their bonanza of financial speculation on Wall Street. Meanwhile, poverty, hunger, homelessness and death have become commonplace among the working class.

The rise in police killings in the United States is the manifestation of the social inequality that pervades American society. Rather than being a “black vs. white” issue, it is the armed representatives of the capitalist state (frequently minorities themselves) carrying out their social function: protecting the property of the wealthy and violently suppressing working-class opposition to the capitalist system. Ending police violence requires the abolition of the capitalist system, which police ruthlessly defend with a bloody fist.

Australian government accelerates border reopening despite soaring COVID-19 cases

Mike Head

Prime Minister Scott Morrison yesterday announced Australia’s international border will reopen next month for states that have reached 80 percent vaccination rates for people over 16, even as the country’s COVID-19 infections hit new highs.

Australia Prime Minister Scott Morrison [Credit: AP/Kiyoshi Ota]

This may start within weeks for New South Wales (NSW), the most populous state, where the current Delta outbreak began in June after the state government refused to implement even limited lockdown measures for 10 days.

Fully vaccinated Australians and permanent residents arriving in NSW will be able to home quarantine for just one week, instead of quarantining at a hotel for a fortnight, pending the supposed success of a brief state home quarantine trial.

Commercial flights out of Australia also will resume for vaccinated Australians. These moves will effectively end 18 months in which restrictions on international travel have limited the arrival of the virus, except for constant leaks from the inadequate quarantine hotels.

Morrison’s announcement marks an acceleration by his Liberal-National Coalition government of a “roadmap” agreed by the bipartisan “National Cabinet” in July, which said international travel would gradually reopen once 80 percent of eligible people were vaccinated nationally and in the relevant state.

This speedup was effectively accepted by yesterday’s meeting of the “National Cabinet” of federal, state and territory government leaders, mostly from the opposition Labor Party. They collectively “noted” the “progress” being made on these fronts by Morrison’s Liberal-National government.

Morrison portrayed the decision as a gain for ordinary people. “It’s time to give Australians their lives back,” he said. That is after denying entry to tens of thousands of Australian citizens and residents for a year and a half by refusing to provide decent and sufficient quarantine facilities.

In reality, the acceleration is being undertaken to satisfy the demands of the corporate elite for a faster full reopening of the economy despite soaring Delta infections.

An article in the Financial Times, the London-based voice of international finance capital, this week declared: “Australia is making ‘big mistakes’ in failing to reopen to the world, with business leaders accusing the government of putting politics before science ahead of a looming general election.”

“Increasingly fed up with COVID-19 lockdown policies, and a failure to rollout vaccines that would allow the economy to open up, the leaders of many of Australia’s biggest companies—including BHP, Macquarie and Qantas—have said the nation will have to learn to ‘live with the virus,’ as many other countries have done.”

This is a demand that Australian governments must suppress the widespread working-class opposition to being forced to return to unsafe workplaces and schools, under conditions in which hospitals are already unable to cope. Scientists and health experts are warning of rising infections in coming weeks as schools and workplaces reopen.

“It’s time for corporate Australia to turn its disquiet and rumblings into a roar,” Greg O’Neill, chief executive of Melbourne-based fund asset management company La Trobe Financial, told the Financial Times. “It’s time for courage and honesty. Not politics.”

“Living with the virus” means that infections must be allowed to spread in Australia, as globally, infecting thousands more people, killing hundreds and inflicting the still fully-unknown effects of “long COVID” on many more.

Since the start of the pandemic, there have been over 108,000 confirmed cases in Australia and more than 1,300 people have died. These numbers are already rising quickly—over 2,350 cases and 12 deaths were reported today—as limited existing restrictions are lifted.

So far, the toll remains much lower than in other countries, such as the UK, where 59,000 children were infected with COVID-19 in the first two weeks of school reopenings and new cases have risen from 2,000 a day in May to nearly 35,000 a day over the past month. In the United States, more than 200,000 new pediatric infections each week have been reported over the past five weeks, mostly the result of school reopenings.

The September 29 Financial Times article featured a declaration by Graham Turner, chief executive of travel company Flight Centre. “The borders should have never been closed,” he told the newspaper. “We’re making some very big mistakes here.” Together with Qantas, the national air carrier, Flight Centre’s profits would be most directly boosted by open borders.

Turner accused Morrison of being “scared of making a wrong move.” Decisions were being made for “political reasons” and that was “the most frustrating thing for business.” Turner said he had spent five weeks working in London over July and August and “they’ve still got a lot of infections but they’re back to normal.”

Yesterday, Turner threatened to mount a legal challenge against internal border closures if state governments did not adopt “reasonable” plans to scrap them within weeks, accusing them of costing his company $100 million a month.

Until now, border closures have confined COVID-19 cases to low figures in most states and territories—Queensland, South Australia, Western Australia, Tasmania and the Northern Territory—allowing their governments to posture as protecting their populations.

The Financial Times article seized upon, and inflated, a month-old “open letter” to Australia’s governments, dated September 1, by the Business Council of Australia (BCA), representing the largest conglomerates operating in Australia. Signed by 79 companies, including the major banks, Uber, Credit Suisse, Bain, Boeing, Bupa and Shell, the letter declared that it was “necessary to open up society and live with the virus.”

Governments had to “stay the course” in imposing a plan to end restrictions once vaccination rates reached 70 percent and 80 percent. However, the open letter did not use the phrase “big mistakes,” as the article suggested. That came from Turner, reflecting a stepping up of the corporate pressure on the federal and state governments.

Pointedly, the Financial Times article said “political pressure” was mounting on Morrison, “whose conservative coalition government has a threadbare majority, is trailing in the polls and is embroiled in multiple scandals.”

Two days later, on October 1, the BCA chief executive Jennifer Westacott issued a new statement welcoming the Morrison government’s “rolling back” of restrictions as “critical” and citing “analysis” by the EY global consulting giant estimating the cost of international border closures to be around $7.6 billion per month.

“This will help send the message to the world that Australia is open for new jobs and investment,” Westacott stated. She also insisted that the next step was to end all state and territory restrictions, including border closures. “Now, state and territory leaders must release their domestic reopening plans and stick to them,” Westacott said. At stake was “our international reputation as a good place to do business.”

As the interventions by the BCA and the Financial Times demonstrate, the ruling capitalist class is intent on driving up profits, regardless of the cost in terms of working-class health and lives.

The UN Crisis

John Feffer

Jair Bolsonaro gave a speech at the UN General Assembly this month. It was full of the usual misstatements and exaggerations for which the Brazilian leader has become notorious. But the most noteworthy part of the speech had nothing to do with its contents. It was Bolsonaro’s refusal of take a COVID-19 vaccine, despite New York City regulations on public gatherings and the UN’s urging of all world leaders to do so.

The planet faces enormous threats at the moment. The pandemic is still raging throughout the world. Climate change is an immediate risk. Wars continue to devastate Yemen, Ethiopia, and Syria.

Given these crises, the United Nations is needed more than ever. And yet the body could not compel Jair Bolsonaro to get vaccinated or risk the fallout of preventing him from speaking to the General Assembly.

This problem of rogue actors has long bedeviled the United Nations. But the rise of right-wing populists who insist on their sovereign (and often selfish) right to do whatever they please poses an additional challenge to the international community.

Nation-states frequently use the principle of sovereignty—the exclusive authority to determine the rules within national boundaries—as a justification for their actions. The COVID-19 pandemic is only the most recent example of the shortcomings of sovereignty. With little regard for the common good, the richest countries made sure to secure more than their fair share of vaccines. The World Health Organization, UNICEF, and the World Bank tried to ensure access to the vaccine for poorer countries by setting up the Vaccine Alliance (GAVI). It was supposed to distribute 2 billion doses by the end of 2021. So far, it has managed to distribute only 240 million.

The problem has largely been one of supply, given the huge purchases of the vaccine by richer countries. But there is also the challenge of delivering doses to countries where medical infrastructure is weak. As a result, the Global Dashboard for Vaccine Equity reports that, as of September 21, just 3.31 per cent of people in low-income countries have been vaccinated with at least one dose, compared to 61.51 per cent of people in high-income countries.

Let’s face it: the rich run the world, and the United Nations just doesn’t have the power to change that.

Nor has the UN risen to the challenge of climate change. Here the problem is one of brokering effective compromises. The UN Framework Convention on Climate Change is the body responsible for convening the Conference of the Parties (COP) meeting every year. In Paris, COP21 did manage to produce a binding treaty on climate change. But the commitments made by all the parties to the agreement were not sufficient to reduce carbon emissions fast enough to prevent a catastrophic increase in global temperatures.

Moreover, the commitments were voluntary. The U.S. delegation insisted on this because it feared that the U.S. Congress would reject any binding pledges.

It’s no surprise, then, that carbon emissions are expected to rise this year by 5 percent, the second largest increase in history.

The fault here again lies mostly with the richest countries—China, the United States, Japan, Germany, South Korea, Canada, Saudi Arabia—that have been the biggest emitters of carbon. But rich countries have also refused to provide enough money to help poorer countries transition to cleaner energy. In 2009, rich countries promised to mobilize $100 billion by 2020 for this transition. A dozen years later, the fund is still $20 billion short.

Of course, many countries face another deadly scourge: war. Imagine how many lives would be saved, how much reconstruction could take place, and how waves of refugees could be reduced if the UN were able to conduct a peacekeeping mission in Afghanistan, establish an on-the-ground presence in Syria, and separate warring parties in Tigray province in Ethiopia. Instead, the UN is relegated the task of providing humanitarian assistance. Its program in Syria, with a target of $4.2 billion a year, is the largest in the world.

But humanitarian assistance is a never-ending drain in the absence of security on the ground. Most of the peacekeeping budget of the UN goes to the existing 13 missions. The Biden administration has promised to pay down the over $1 billion peacekeeping bill it owes the UN, but the UN is going to need a lot more than that to play an effective role in bringing peace and security to the most conflict-torn areas of the world.

For one thing, the UN doesn’t have a capability to respond quickly to emergencies around the world. An Emergency Peace Service could fill that gap. It has some support internationally, and it’s even come up twice as bills in the U.S. Congress. Without a permanent, professional corps of emergency responders, the UN will constantly be one step behind in dealing with crises around the world.

This is not an easy time for the United Nations. It is underfunded. Proposals to reform its governance have largely gone nowhere. It has been forced to cobble together ad hoc responses to the world’s biggest problems.

But perhaps the biggest challenge to the UN is the refusal of nation-states to delegate sufficient authority to international institutions. Right-wing populists like Donald Trump and Jair Bolsonaro attacked “globalists” on a daily basis. They have done as much as possible to destroy international agreements, but they’re not alone. Russia’s Vladimir Putin and China’s Xi Jinping have insisted that they have the right to do whatever they want within their own national borders. Rodrigo Duterte of the Philippines is resisting any “interference” in his drug war as part of an investigation into his government’s human rights abuses. Daniel Ortega of Nicaragua has similarly pushed back against UN criticism of his human rights record. Most strong-arm leaders eye the UN skeptically.

Without a lot of money or institutional credibility and facing a strong anti-internationalist philosophy, the United Nations has a great deal of difficulty compelling its members to protect human rights, the environment, or the rule of law. Look how ineffectual it was in dealing with Jair Bolsonaro.

Without credible enforcement mechanisms, the UN will be incapable of making the Bolsonaros of the world behave responsibly. And unfortunately, the disease of Bolsonarism is spreading.

Australia: 2,000 StarTrack truck drivers strike over pay and job security

Jim Franklin

Around 2,000 truck drivers at StarTrack, a parcel, freight and logistics company owned by Australia Post (AP), held a 24-hour national strike on Thursday, September 23.

Striking StarTrack workers (Photo: Facebook/TWUAus)

As part of negotiations for a new enterprise agreement (EA), the workers are demanding a limit on outsourcing and for labour-hire casuals to receive the same pay and entitlements as permanent employees. According to the Transport Workers Union (TWU), outsourcing at some StarTrack facilities has reached as high as 70 percent.

The workers are also seeking a wage increase greater than the company’s current offer of 3 percent per annum. The union has not publicly specified what figure it is demanding, meaning that anything above 3 percent will likely be touted as a “victory,” even if it falls short of the recently announced official CPI increase of 3.8 percent.

The dispute takes place in an atmosphere of mounting anger throughout the trucking industry. Around 4,000 Toll drivers struck for 24 hours on August 27, and thousands of workers at Linfox, Bevchain have also recently voted in favour of protected industrial action. Another 3,000 workers at FedEx struck for 24 hours on Thursday.

These major transport companies are increasingly employing workers on short-term contracts, effectively creating a two-tier system to undermine the conditions of full-time drivers. This includes changes to shifts and the allocation of work to casuals and contractors, rather than giving overtime hours to full-time workers.

Despite the common grievances of workers throughout the transport industry, the TWU has isolated the strikes to one company at a time, minimising disruption to the supply chain. Although more than a month has passed since the Toll strike, and none of the issues have been resolved, the union has barely mentioned the company’s name and has presented no plan for further action at Toll.

Speaking outside StarTrack’s Minchinbury, Western Sydney facility, on September 23, TWU National Secretary Michael Kaine claimed that these attacks on workers’ conditions were the result of Australia’s major trucking companies coming under “incredible commercial pressure” from international competitors such as Amazon Flex.

Kaine continued: “These companies, like StarTrack and others, have traditionally been good companies. With these workers, they have built up good secure jobs.”

Highlighting the union’s close alignment with management, Kaine invited StarTrack to “go to the federal government together and fix this Amazon effect.” Kaine issued a similar invitation to Toll’s management during the August 27 strike.

The TWU’s campaign against Amazon has nothing to do with defending the rights of gig-economy workers—probably the most exploited layer in the transport industry—but is instead directed at shoring up the profitability of Australia’s multi-billion dollar trucking companies.

The nationalist line that “good” Australian companies must be defended against their overseas rivals serves only to pit Australian workers against their counterparts internationally. The struggle to defend pay and conditions at StarTrack, Toll and elsewhere will not be won through appeals to the Australian ruling class, but through a turn to the global working class.

Kaine was careful to reassure management that the union would continue to enforce the company’s use of casual and contract labour in “peak” periods. Kaine said: “Always in our agreements, there is the flexibility for the company to be able to hire more workers, truckies, sortation workers in to deal with those peaks.”

The reality is, the growth in online shopping due to COVID-19 lockdowns has seen StarTrack and AP operating at “peak” levels year round. Rather than responding to this surge with the creation of new full-time jobs, the companies have seized upon the pandemic as an opportunity to entrench the massively increased use of contractors, usually reserved for Christmas and Easter, as standard operating procedure. This is a direct product of the “flexibility” Kaine defends as an unquestionable feature of every EA enforced by the TWU.

This month AP announced annual profits of more than $100 million before tax and a 10.3 percent revenue increase to $8.27 billion. StarTrack’s volumes increased by 12.2 percent over this period, making it AP’s most profitable division.

Both the TWU and the Communication Electrical Plumbers Union (CEPU), which covers most AP workers, have signed sell-out EAs for years that have resulted in the decline of workers’ conditions and pay.

Last year, under the guise of the pandemic, the CEPU worked with AP management to implement restructuring by introducing the Alternative Delivery Model (ADM), which doubled the workload of postal workers. This model could only be introduced because the CEPU signed a Memorandum of Understanding behind workers’ backs. This agreement contained a no-strike clause and served as a guarantee that the union would enforce the ADM.

Last month, the CEPU rammed through another sell-out EA at AP which offered a meagre 3 percent per annum wage rise—really a pay cut in view of inflation and the fact that workers did not receive a pay rise at all in 2020—and committed workers to ongoing restructuring.

Along with the previous EAs, these deals have allowed management to increase the use of casuals and contractors to replace full-time jobs. Far from representing the interests of workers, the enterprise bargaining system implemented by the Hawke-Keating Labor governments has been a mechanism to divide workers and tie them to the demands of their employers.

The unions, which fully support this anti-worker system, have acted as an industrial police force, imposing this straitjacket on the working class.

This is highlighted at AP by the fact that the TWU and CEPU have refused to organise any joint action to defend workers’ conditions, even though AP workers and StarTrack drivers were undergoing EA negotiations simultaneously.

StarTrack management is seeking to drive a wedge between the workers and is trying to undermine the action by StarTrack drivers. It is using the fact that one section of the workforce, under the CEPU, has signed a new EA and is now receiving the first three percent wage rise, while those workers represented by the TWU have yet to do so and are therefore “missing out.”

This was highlighted in a flyer sent to employees by StarTrack management on August 31, the day after AP announced that workers had voted up the new EA.

The flyer stated: “Star Track has made it clear from the beginning that we will not be providing any greater pay offer than what we've offered to 30,000 Australia Post employees…. The TWU’s delays will cost you money and will hurt all Australians who are reliant on us at this challenging time…. Don’t let the TWU hold your pay rise to ransom over its industry campaign.”

The situation confronting StarTrack workers along with their brothers and sisters throughout the transport industry and AP is the product of decades of betrayals by the unions.

Jeff Bezos announces $1 billion biodiversity pledge

Nick Barrickman

Last month former Amazon CEO Jeff Bezos announced that he would allot $1 billion to a conservation campaign aimed at the preservation of 30 percent of the world’s biodiversity. Bezos, up until recently the world’s wealthiest individual, declared on September 19 that his Earth Fund philanthropy would fund conservation efforts “where there is significant need and opportunity, as well as where there is a strong political commitment to nature.”

The investment will be part of the “30 by 30” campaign which various conservation charities have announced. The campaign aims to protect 30 percent of the world’s habitats by 2030. The Earth Fund investment will target “areas that are important for biodiversity and carbon stocks and will give emphasis to the central role of local communities and Indigenous peoples in conservation efforts.”

Jeff Bezos (Credit: Wikimedia Commons)

The Fund will seek to develop regions in the Congo Basin of Africa, the tropical Andes as well as the tropical Pacific region, “where there is significant need and opportunity, as well as where there is a strong political commitment to nature.” Bezos did not announce what specific projects the money would be funneled toward.

He received immediate praise from politicians, such as British Prime Minister Boris Johnson and President Ivan Duque of Colombia. President Joe Biden’s special envoy for climate John Kerry declared that the pledge “comes at a pivotal moment as we seek to avoid the loss of irreplaceable biodiversity and further destabilization of the climate.”

The announcement marks the first tranche of funding offered by the Earth Fund. Founded in 2020, Bezos declared its aim was to “explore new ways of fighting the devastating impact of climate change on this planet.” To this end, the then-Amazon CEO pledged $10 billion of his vast wealth (calculated at $198 billion, according to the Bloomberg Billionaires Index).

The Earth Fund was unveiled amid the public health and social catastrophe which has accompanied the COVID-19 pandemic. Officially, over 4.7 million lives have been lost, while other sources have estimated the death toll to be several magnitudes higher. In the United States, the global epicenter of the pandemic, over 700,000 have lost their lives.

While Bezos professes his sympathy for various species of flora and fauna facing extinction, the giant corporation he founded has taken advantage of the extinction of large numbers of human beings in the course of the pandemic. Amazon specifically has profited enormously from the shelter-in-place and remote working conditions that many in the population have adopted because of coronavirus.

In 2020 the corporation raked in $21.3 billion in profits. In late July, the company posted a second quarter 2021 income of $7.8 billion, which was an increase of 50 percent from the same quarter in 2020. Amazon expects this year’s third quarter revenues to improve upon 2020’s numbers by “only” 10-16 percent, a slowing growth, which Variety explains is a product of “the laws of large numbers” and the abating “surge of online orders a year ago.”

The Fund follows other philanthropic efforts provided from the grotesque fortunes of America’s billionaires. The Washington Post, which is owned by Bezos, notes that its boss “remains among the world’s largest contributors to climate philanthropy.” Aside from his climate pursuits, Bezos has supported numerous charity initiatives, including funds for the homeless and preschool services for low-income children.

Other wealthy benefactors to the climate cause include former New York City mayor and Democratic Party presidential candidate Michael Bloomberg, “who has given more than $100 million to the Sierra Club’s Beyond Coal campaign,” and Bill Gates, who “has led a for-profit initiative, Breakthrough Energy Ventures, which runs a $1 billion fund focused on climate-mitigation technologies.”

While the Earth Fund’s investments may find their way to a few worthy causes, the vast wealth commanded by Bezos is a particularly crude expression of the degeneration of modern capitalist society, characterized by immense poverty and social inequality.

The World Socialist Web Site, describing the charity of one of Bezos’s fellow billionaires, wrote in 2010 that such initiatives represented “the return of the aristocratic principle.” Under this precept, “the population was essentially at the mercy of the great ones in society, who bestowed—or did not bestow—favors and gifts as they saw fit.”

The summer has been dominated by billionaire aristocrats venturing into space. Now, with the “green” ventures of Bezos and other billionaires, this principle has been extended to animal and plant life as well.

Due to criticism over Amazon’s own substantial contributions to global warming, the e-commerce giant introduced the Climate Pledge campaign in 2019. The campaign, which over 200 corporations have signed onto, boasts that its members account for “$1.8 trillion in global annual revenues and have more than 7 million employees across 26 industries in 21 countries.” The Post notes, “Bezos unveiled the initiative after Amazon, for years, resisted revealing its environmental impact through CDP, formerly known as the Carbon Disclosure Project—a widely used framework for corporate reporting.”

The fortune behind Bezos’s Earth Fund has been made possible by the backbreaking exploitation of the Amazon workforce throughout the pandemic and before. Amazon’s workforce has surged from fewer than 800,000 workers in 2019 to over 1.3 million today. According to Business Insider, 1 in 153 American workers currently works for Amazon.

At the same time, Bezos’s stock wealth grew by $75 billion in 2020 alone. According to Yahoo Finance, “$1.7 million for Jeff Bezos is the same as $1 for the average American.” Bezos rakes in an astonishing $3,715 per second, an amount which dwarfs the average American weekly income of $984.

The conditions in Amazon’s warehouses give lie to the American oligarch’s humanitarian pretensions. A Post review of Occupational Safety and Health Administration (OSHA) files since 2017 recently found that the retailer had more instances of injuries that “caused employees to miss work or be shifted to light-duty tasks” than other businesses in the warehousing industry.

In a recent exposure of Amazon’s abusive practices, the state of California recently passed laws which bar the company from demanding productivity from workers at rates which force them to forego state-mandated breaks and bathroom visits.

Rather than abiding by the oligarchic principle, the protection of biodiversity and the environment requires a massive redistribution of social wealth from the capitalist class to society’s producers. Only in a society in which social activity and life itself are freed from the intrusions of the profit system can a truly scientific response to climate change be mounted.

Right-wing Japanese ruling party elects new leader

Peter Symonds

The ruling Liberal Democratic Party (LDP) elected former foreign minister and defence minister Fumio Kishida as party leader on Wednesday to replace Yoshihide Suga. Suga stood down in early September amid widespread criticism of his handling of the COVID-19 pandemic and public opposition to his government’s decision to proceed with the Olympic Games.

Kishida won a second-round vote against Taro Kono, also a former foreign minister and defence minister, after none of the four candidates in the first round won a majority. He relied on the support of the LDP factions and parliamentarians to defeat Kono, who is reportedly more popular among the LDP rank and file. Kishida will almost certainly be confirmed as Japan’s new prime minister at a special session of the parliamentary Diet on Monday.

Fumio Kishida in October 2017. (Photo: Wikimedia commons)

Kishida is variously characterised in the international media as “a moderate,” “the establishment choice,” or as the Financial Times put it, “Mr Status Quo.” The LDP, however, is a right-wing party that shifted even further to the right under the eight-year prime ministership of Shinzo Abe who stood down for health reasons in 2020.

As foreign minister under Abe from 2012 to 2017, Kishida is closely identified with Abe’s militarist build-up and increasingly confrontationist stance against China, encouraged by US President Obama as part of his “pivot to Asia.” The Abe government further undermined the so-called Article 9 of the Japanese constitution that bars the country from having armed forces and renounces war as a sovereign right. It rammed through legislation in 2015 allowing for “collective self-defence”—that is, to take part in the wars with the US and its allies.

Successive Japanese governments have sought to pay lip-service to Article 9 by claiming that the country’s military forces are purely for self-defence and are armed only with defensive weapons. In an interview this month with the Wall Street Journal, Kishida advocated that the Japanese military be expanded to include missiles able to strike potential enemies like China and North Korea.

Kishida is supportive of the Quadrilateral Security Dialogue—a quasi-military alliance of the US, Japan, India and Australia—which held its first face-to-face leaders’ meeting in Washington last week. His comments to the Wall Street Journal mouthed the Biden’s administration’s propaganda that Asia is “the front line of the clash between authoritarianism and democracy,” even as all four governments ride roughshod over democratic rights and norms.

Like their counterparts in the US, the Japanese ruling elites are fearful that the economic rise of China will undermine their economic and strategic interests. Japan lost its position as the world’s second largest economy in 2010 when it was overtaken by China in GDP terms. By joining the Biden administration’s aggressive confrontation and military build-up in Asia, the LDP government is seeking to reverse its historic decline.

Like Biden, Kishida provocatively advocates the strengthening of ties with Taiwan—an island that both the US and Japan de facto recognise as part of China. In doing so, he is undermining diplomatic relations with Beijing, which are based on the “One China” policy, and deliberately stoking up tensions around this explosive flashpoint.

Kishida can be considered a “moderate” only as compared to fascistic layers within the LDP leadership exemplified by one of the other contenders for party leadership—Sanae Takaichi. A former internal affairs and communications minister, Takaichi is an admirer of Margaret Thatcher and gained notoriety for her endorsement of a 1994 book praising Adolf Hitler’s electoral tactics. She regularly visits the notorious Yasukuni Shrine that is a symbol of Japanese militarism.

Abe, who retains considerable influence within the LDP, called on its supporters to back either Kishida or Takaichi. When Takaichi was forced to withdraw after the first round, Abe’s forces ensured Kishida’s victory. Like Abe, Takaichi and many other leading LDP figures, Kishida belongs to the ultra-nationalist Nippon Kaigi parliamentary grouping, which campaigns for a new constitution, promotes militarism and patriotism, and seeks to whitewash the crimes of Japanese militarism in the 1930s and 1940s.

Kishida will shortly have to lead the LDP in lower house elections that are to be held before November 28. While the party is unlikely to lose the election, Kishida’s position would suffer if he presided over significant losses. That is undoubtedly why his statements on domestic issues in the lead-up this week’s leadership contest have had a populist tinge.

Kishida is well aware of the widespread public hostility to the government over its failure to stem the surge in COVID-19 infections and deaths, and its decision to proceed with the Olympics. He has promised tens of trillions of yen in economic subsidies and has called for a “new Japanese-style capitalism” that would address widening social inequality.

In his Wall Street Journal interview, Kishida declared: “If the profits from growth are monopolized by a few people, the gap will widen even further. It’s not just about growth, it’s about distribution. Distribution equals income.”

The widening gulf between rich and poor has increasingly become a public issue as successive governments have undermined the life-long employment system that guaranteed permanent jobs to significant sections of workers. Around 40 percent of workers are now in uncertain “non-regular” jobs with lower wages and poorer conditions.

More than 10 million people live on less than $US19,000 a year, while one in six lives in relative poverty on incomes less than half the national median. Last year under the impact of the pandemic, more than half a million workers lost their jobs. At the same time, Forbes Asia reported in April that the collective wealth of the country’s 50 richest people had surged by nearly 50 percent as compared to a year earlier.

Kishida’s calls for a new Japanese capitalist economy are nothing but empty election posturing. He was a loyal minister in the Abe government that pushed through the pro-market restructuring that exacerbated social inequality. He promises tens of trillions of yen in economic stimulus—most of which will flow into the pockets of big business—while at the same time advocating fiscal discipline, which means further inroads into social spending.

China’s Evergrande crisis has far-reaching implications

Nick Beams

The crisis surrounding the debt-laden Chinese property developer Evergrande has disappeared from “headline news”—at least for the moment—but its implications for the Chinese economy are coming more clearly into view.

Men on electric bikes wait for riders near the Evergrande headquarters, center, in Shenzhen, China, Friday, Sept. 24, 2021. Seeking to dispel fears of financial turmoil, some Chinese banks are disclosing what they are owed by a real estate developer that is struggling under $310 billion in debt, saying they can cope with a potential default. (AP Photo/Ng Han Guan)

The Evergrande crisis was sparked by a decision of the Chinese government in August to tighten the regulations on access to credit—the so-called three red lines—out of fear that the build-up of debt, particularly in the property sector, was threatening to create the conditions for major financial turbulence.

Evergrande was hit hard as the inflow of money needed to finance its business model dried up because it fell far short of the new requirements. But the problems confronting Evergrande, which has failed to meet interest payments on dollar-denominated loans, extend throughout the property sector.

This week Bloomberg published a list of 10 property companies, excluding Evergrande and others that had defaulted, now facing major issues.

First on the list was Fantasia Holdings, based in Shenzhen, which operates across China, including in the Guangdong province and Shanghai. On Monday Moody’s cut its rating for the company further, citing its “increased refinancing risks because of weakened funding access and sizable amount of maturing debt.”

A dollar bond maturing in 2024 issued by the company has fallen to 31 cents on the dollar compared to 98 cents when it was issued in March. Its share price on the Hong Kong stock market has plunged by 58 percent this year and it holds cash and cash equivalents of $4.2 billion compared to liabilities of $12.9 billion.

Other companies showed similar tendencies, though not quite as extreme.

A typical example was China South City Holdings, which is based in Hong Kong and has projects in Shenzhen and Nanchang. S&P Global revised its outlook for the company to negative this month saying it may need to “run down its cash buffers to meet large offshore maturities” and that it “may not be able to refinance at reasonable costs.” A 2023 bond which stood at 93 cents on the dollar when issued in March has fallen to 61 cents and the company’s share price has dropped 43 percent this year. And the list goes on.

The crisis in the property market has far-reaching implications for the Chinese economy as a whole because of the role property development and land sales have played in fueling economic growth.

An article this week in the Economist provided some facts and figures on how significant it has been, noting that the turbulence could imperil everything “from local-government and household finances to the country’s growth model.”

Residential investment makes up 15 percent of Chinese gross domestic product (GDP). But according to calculations by economists Kenneth Rogoff of Harvard University and Yuanchen Yang of Tsinghua University, once construction and related industries are added property development accounts for 29 percent of GDP.

Their article traced the origins of the crisis to changes made by the Chinese government in 1994 when the central government overhauled the tax system and local government authorities lost a large portion of their revenue. They were also prevented from directly raising debt, yet at the same time were charged with reaching high-growth targets, sometimes exceeding 10 percent a year.

Rogoff and Yang explained that “Selling land became one of the few things municipal officials could do to generate revenues, which would in turn finance roads and other public works. They could also set up companies that could borrow from banks and raise debt from other sources.”

“This arrangement,” the article continued, “meant economic growth was tightly bound to booming property” with Chinese leaders cheering on the process “for the best part of 30 years.”

According to the article, between 1999 and 2007 the quantity of rural land transferred to urban use increased at an annual average rate of almost 23 percent and public land sales rose by an average of 31 percent a year.

In 2008, the Chinese economy was dealt a major blow as some 23 million jobs were lost with the onset of the global financial crisis. Fearing the eruption of social struggles by the working class, the Chinese government undertook major stimulus measures, amounting to $586 billion, much of which came in the form of loans and shadow-banking funds for property developers. As a result, by 2010, land sales accounted for more than 70 percent of municipal revenues.

Over the past several years, Chinese authorities have been trying to rein in the growth of debt, fearing its consequences for the stability of the financial system. With previous sources of finance becoming more constricted, property development firms became increasingly reliant on pre-sales income where buyers paid for their apartments, sometimes in full, months or even years before completion.

According to calculations by the French bank Natixis, cited in the article, “between 2015 and July 2021 the share of pre-sale funds as a source of funding for developers rose from 39 percent to 54 percent.” In the case of Evergrande, thousands of buyers have paid out large amounts of money only to find that the apartment they bought may not be completed—a situation that has led to protests outside Evergrande offices.

Other commentary on the Evergrande crisis has pointed to its implications for the economy as a whole. A recent article in the Financial Times described it as the end of China’s “build, build, build model” and reported there is enough empty property in China to house more than 90 million people.

Because of their intimate connection with the property market, there is a financial crisis building up for local government authorities.

This week Bloomberg reported that, according to economists at Goldman Sachs, hidden local government debt had risen to an amount equivalent to more than half of China’s GDP.

The report said the total debt of local government financing vehicles rose to around 53 trillion yuan ($US8.2 trillion) at the end of last year, up from 16 trillion yuan in 2013. This is equal to 52 percent of GDP and more than outstanding government debt.

The feverish property development and build-up of debt have created the conditions for a major financial crisis. Their unravelling will also spur explosive social struggles by the working class against the Chinese Communist Party regime.